El Cerrito, CA – August 13, 2024 – Four years after the State Auditor’s report highlighted the severe financial mismanagement and fiscal irresponsibility plaguing El Cerrito, the City Council remains conspicuously negligent in addressing the crisis. The consequences of their inaction are stark, with the city teetering on the brink of bankruptcy, driven by a chronic reliance on reserves, unfunded pension liabilities, and a failure to implement meaningful reforms.
El Cerrito’s fiscal crisis has, unfortunately, become a norm rather than a wake-up call for its leadership. Instead of taking decisive action to rectify the financial chaos, the City Council has chosen to sidestep the recommendations of the State Auditor, allowing the situation to deteriorate further..
The State Auditor’s 2020 report painted a grim picture of El Cerrito’s finances, ranking it among the top 6 cities in California most likely to face bankruptcy. The warning signs were clear: excessive reliance on dwindling reserves, ballooning pension liabilities exceeding $85 million, and a glaring absence of sustainable revenue streams. Yet, four years later, the City Council has failed to take substantive measures to address these critical issues.
Instead of enacting necessary budget cuts, streamlining operations, or renegotiating contracts, El Cerrito’s leaders have allowed the city’s financial woes to fester. The FY25 budget, once again likely be balanced on the back of depleted reserves, will leave the city’s savings well below the Government Finance Officers Association’s recommended levels. The city however touts strong reserves but $10 million of the $16 million are restricted reserves.
The city’s top-heavy leadership structure remains untouched, and despite the State Auditor’s warnings, a classification and compensation study was implemented, further straining the city’s finances.
The City Council’s approach to public communication has been riddled with obfuscation, half-truths, and outright lies. In a recent presentation, the City Manager downplayed the severity of El Cerrito’s financial situation, glossing over the $85 million in unfunded pension liabilities—a substantial economic burden, even if it doesn’t appear on the balance sheet. She also claimed that the City was never close to bankruptcy, despite the issuance of the State Auditor’s going concern letters and the 2020 designation of El Cerrito as the 6th most likely city in California to go bankrupt. With the city now ranked 13th most likely to become bankrupt, it is clear that El Cerrito remains dangerously close to financial collapse. The City Manager’s misleading statements, combined with the Council’s ongoing refusal to address the fiscal realities, have severely eroded public trust and intensified concerns about the city’s long-term viability.
El Cerrito’s leadership claims that the city’s financial woes are out of their control, attributing the crisis to external factors like increased non labor related costs. However, this narrative falls apart under scrutiny. Exorbitant wages for most of the city’s leadership, excessive staffing levels, and an increased reliance on consultants are fully within their power to address. Instead of taking steps to contain costs, El Cerrito continues to grow its budget, a stark contrast to other cities in Contra Costa County that have successfully recovered from pandemic-related challenges through prudent fiscal management.
Additionally, the use of “scare tactics” has become a rather successful operating model for the City Manager. By waiting until the budget adoption day to address critical issues, the City Manager creates a sense of crisis, which in turn creates confusion and demands immediate action by the City Council—irrespective of cost and common sense. This approach provides cover for accepting irrational decisions under the threat that services will be decimated if cuts are made. While this claim isn’t necessarily true, it becomes a self-fulfilling prophecy when the City Manager refuses to engage in advance planning to address the city’s inflated expense budget.
The situation in El Cerrito is emblematic of a broader failure in governance. When leadership prioritizes short-term optics over long-term solutions, it is the residents who suffer. The city’s financial instability is not just a number on a ledger; it impacts essential services, public safety, and the quality of life for all residents. The continuation of this fiscal mismanagement threatens the very fabric of the community.
El Cerrito voters should reject any new tax or bailout measure until the fiscal crisis is addressed without additional support from taxpayers. The future of El Cerrito depends on it.
To avoid a fiscal catastrophe, El Cerrito needs robust crisis management led by independent experts who can conduct a thorough analysis of the city’s operations, identify cost-saving opportunities, and develop a sustainable financial plan. This process must include renegotiating labor and vendor contracts, consolidating redundant functions, and making hard choices about service levels.
Moreover, the residents of El Cerrito must demand greater accountability and transparency from their elected officials. It is no longer acceptable for the City Council to ignore the glaring issues at hand. The community deserves leaders who are willing to make the tough decisions necessary to steer the city back on course. This includes not only addressing the immediate fiscal challenges but also laying the groundwork for a more sustainable and resilient financial future.
The upcoming elections offer an opportunity for voters to elect representatives who are committed to fiscal responsibility and transparency. It is crucial that candidates running for City Council are held to a high standard, with clear plans for addressing the fiscal crisis and restoring trust in local government.
El Cerrito’s fiscal crisis is not an inevitability; it is the result of years of neglect and poor governance. The community must come together to demand change, starting with the rejection of any new tax measures until the City Council takes meaningful steps to resolve the underlying issues. The path to recovery will not be easy, but with strong leadership and a commitment to accountability, El Cerrito can emerge from this crisis stronger and more resilient.
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El Cerrito Committee for Responsible Government (ECCRG) 